Economics is often used in literary studies, but rarely free market economics. Austrian economics, with its emphasis on subjective value (Menger), human action (Mises), spontaneous order and knowledge (Hayek), and entrepreneurship (Kirzner), seems a particularly fruitful source of ideas for literary studies.

Sunday, July 29, 2012

If you are an innovator or an entrepreneur, you may need a certain level of science, technology, engineering, and math -- but if you really want to know how to innovate, you need to know how to write poetry, according to Daniel W. Rasmus in his recent Fast Company article, How Innovation is More Science than Poetry.

When you learn how to write poetry, you learn that details matter, design is critical, that you need to understand the market, that structure informs, that you need to cut ruthlessly, that you need to seek collaborative criticism religiously, that you must actively explore the unknown, to observe the world with all your senses, to take copious and nonlinear notes, that you have to realize that what you end up with may not be what you intended, and that endings make all the difference.

If that sounds like what any entrepreneur should do, it's because it is -- whether that entrepreneur is in the catallaxy or the literary order.

Yesterday I watched The Dictator. I especially recommend it to Hayekians who understand the difference between organizational hierarchies and scale-free spontaneous orders, because the differences between the two are pointed out in both.

The dictator of The Dictator, Aladeen, is a despotic ruler over an oil-rich poor north African country. His is a top-heavy Big Man dictatorship, and he is pursuing policies that benefit his ego, but harm the country. Of course, his hierarchical structure is ineffective at all levels, in no small part because such a structure is ineffective at such large scales. Big Man leadership does not scale to the size of countries.

But democracy is not the answer to everything, either. The shop owner, Zoey, believes she can run her store on democratic principles. The result is a store that is a mess, in which nobody respects her or the well-being of the store itself, resulting in inefficencies and theft. When Aladeen convinces her to put him in charge -- and if we ignore the absurd ways he gets people to fall in line that are played up for comic purposes -- we see that the imposition of an organizational hierarchy results in a clean, well-organized, well-managed business. But this, of course, is precisely the level at which such a network structure is appropriate. And it is also the level at which scale-free network strucutres are not appropriate.

At the end, when Aladeen tears up the new constitution, he gives a speech celebrating dictatorship, saying if America had a dictatorship, they could bail out banking cronies, etc. It was a list of every questionable thing the U.S. government has done over the past decade. However, if you are going to mistakenly believe that this means there is no real difference between democracy and dictatorship, the film twists you in another direction. Yes, government is government in many ways, but if you're going to have one, democracy is the better kind. Not, of course, that Wadiya will ever get one . . .

Thursday, July 26, 2012

Spontaneous order theory is primarily about networks. Hayek of course primarily talked about social networks: the catallaxy, common law, and money. Michael Polanyi discussed science as a spontaneous order. Both were talking about social network dynamics.
Two Irish researchers have analyzed three epics -- the Iliad, Beowulf, and Tain Bo Cualinge -- and discovered that they have highly realistic social networks. Actually, they discovered that the Iliad has the most realistic social network of the three, while the Tain has a social network that more closely resembles the Marvel Universe. Interestingly, the Tain and the Marvel Universe seem to share the same focus on superheroes -- which makes one wonder what it is about superheroes that changes the structure of social networks.
Epics and novels are certainly open to such analysis. There are a lot of opportunities in this kind of spontaneous order research in literature.
Here is the original source of the paper. And here is the original paper.

Wednesday, July 25, 2012

In discussing the importance of cooperation, reciprocity, and punishing cheaters, Eric Beinhocker in The Origins of Wealth points out that

Our reciprocity software, however, is not hardwired---it can adapt to local circumstances. When we are in an environment in which most of our experience is of other people's cooperation and reciprocation and in which social norms give us signals that people can be trusted (e.g., people tell admiring stories about self-sacrificing, trustworthy types), then our mental cooperation software will tend to be biased toward cooperating. It also will be more surprised and more forgiving when it encounters an example of defection or cheating. In essence, our minds statistically sample the population around us, and if people are usually cooperative, then when we encounter a cheater, we will tend ot assume that the person's behavior is probably the result of an error or misunderstanding. In contrast, in a low-cooperation, high-cheating environment with social norms that don't support cooperation (e.g., the stories are all about thieves, and people tell you to "watch your back"), our cognitive cooperation software biases us toward being suspicious. We react harshly to the first signs of cheating, forgive only slowly if at all, and are likely to resist cooperating until given a isgn of cooperation from the other party first.

The local tuning of reciprocity norms can create very complex dynamics at the level of populations. High-cooperation societies can see collapses in cooperation if cheating reaches a critical mass; low-cooperation societies can get stuck in uncooperative, eocnomically impoverished dead-ends; and when people from different cooperative traditions mix, it can lead ot misunderstanding and turmoil. (269-270).

This is the argument Martin and Storr make regarding the role of stories in perverse spontaneous orders, and is similar to Sanford Ikeda's arugments on trust. Our stories create our cultures, and if our stories tell us we are trustworthy and cooperative, we will become trustworthy and cooperative. To whatever extent our stories are a reflection of our culture, they can act to reinforce our attitudes. If we are a high-trust, high-cooperation culture, this is beneficial. If we are not, reflectionist literature can be downright harmful. The same arguments, in reverse, can be made regarding literature critical of its society. Such interrelations should be investigated more thoroughly. Stories can make a huge difference in our social lives.

Tuesday, July 3, 2012

Today is Franz Kafka's birthday. There are few people who were better able to write about the nature of life in the bureaucratic state than Kafka. In many ways this makes him a literary prophet, as the modern bureaucratic state was not yet in place when Kafka was writing.

The Castle is a book about trying to penetrate an impenetrable bureaucracy. The protagonist is simply known as K -- having been reduced to little more than a letter by the bureaucracy he has to deal with. K has been called to the Castle for a job, but nobody in the bureaucracy can find the job order. Thus, K cannot do the job he has been called to do, but neither is he allowed to leave, because he may in fact have to do the job. The entirety of the novel is K waiting and trying to get the bureaucracy to let him either work or leave. This does not sound like the premise of a compelling novel, but Kafka is one of those rare writers who can make what would apepar to be the most boring premise strangely compelling. And for anyone who has had to deal with a bureacracy, whether public or private, the situation is certainly highly relatable.

The Trial features a protagonist known as Joseph K. He has more of a name than does the protagonist of The Castle, but even here we see man being reduced in the face of the impenetrable something that consists of modern society. Joseph K finds himself accosted by strange men who tell him he is to attend a trial. He does not know who is trying him, or why, but he is determined to prove his innocence. Yet, over time, Joseph K becomes convinced that, since he has been accused, he must have done something wrong -- and eventually he becomes complicit in his own execution, wishing he could take the knife and kill himself for what(ever) he has done. Joseph K thus becomes complicit in his own oppression. He becomes convinced he must be guilty of something, having been accused. It does not matter what the accusation is. More, it is important that he not know what it is, as the lack of information creates the conditions such that he finds through self-examination himself guilty of something. Thus, in love with his executioners, does he willingly walk to his own execution.

One can certainly see these things in oppressive regimes. But Kafka was not a prophet of obvious oppression as we saw in the Soviet Union or Nazi Germany. No, Kafka was a prophet of the oppression created by those who control through red tape and withholding information. As Joseph K observes: “I see, these books are probably law books, and it is an essential part of the justice dispensed here that you should be condemned not only in innocence but also in ignorance.” He is the prophet of opporession through vague accusation, what we experience as political correctness. He is the prophet of the oppressive weight of bureacracy.

At the same time, this is a bit odd. The word "bureacracy" means "rule of the desk," and the same Kafka who said “Every revolution evaporates and leaves behind only the slime of a new bureaucracy” also proclaimed there to be nothing more beautiful than an office desk. But it is perhaps precisely because of this ambiguity of feeling that Kafka was able to write about bureaucracy in such a way that it continues to move and matter.
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Update: It occurs to me that it may be profitable to read The Castle in light of Mises' Bureaucracy.
More on Kafka at Anarchy and Culture.

Monday, July 2, 2012

It seems Sarah Skwire has been busy of late. She has the lead essay in the latest Cato Unbound: Bonfire of the Cliches. She argues that we should be careful when pronouncing this or that author or work is anti-business or anti-markets. Often, the works are far more complex than that. Often, we are encountering the biases of the literary critic more than the contents of the text.
Be on the lookout for more essays in this series.